Shareholder'S Instructions For Schedule K-1 (Form 1120s)

2016

Department of the Treasury

Internal Revenue Service

Shareholder's Instructions

for Schedule K-1

(Form 1120S)

Shareholder's Share of Income, Deductions, Credits, etc.

(For Shareholder's Use Only)

You may be liable for tax on your

If you are required to file Form 8082

Section references are to the Internal

Revenue Code unless otherwise noted.

share of the corporation's income,

but don't do so, you may be subject to

whether or not distributed. Include

the accuracy-related penalty. This

Future Developments

your share on your tax return if a

penalty is in addition to any tax that

For the latest information about

return is required. Use these

results from making your amount or

developments related to

instructions to help you report the

treatment of the item consistent with

Schedule K-1 (Form 1120S) and its

items shown on Schedule K-1 on your

that shown on the corporation's

instructions, such as legislation

tax return.

return. Any deficiency that results

enacted after they were published, go

from making the amounts consistent

Your share of S corporation income

may be assessed immediately.

isn't self-employment income and it

What’s New

Errors

isn't subject to self-employment tax.

The shareholder’s responsibility to

If you believe the corporation has

The amount of loss and

consider and apply any applicable

made an error on your Schedule K-1,

deduction you may claim on

limitations on losses, deductions, and

notify the corporation and ask for a

your tax return may be less

CAUTION

credits is highlighted in the caution

corrected Schedule K-1. Don't change

than the amount reported on

text below. This includes the

any items on your copy of

Schedule K-1. It is the shareholder's

responsibility to figure the basis of

Schedule K-1. Be sure that the

responsibility to consider and apply

your stock in the corporation at the

corporation sends a copy of the

any applicable limitations. See

end of each corporate tax year. See

corrected Schedule K-1 to the IRS. If

Limitations on Losses, Deductions,

the

Worksheet for Figuring a

you are unable to reach agreement

and

Credits, later, for more

Shareholder's Stock

Basis.

with the corporation regarding the

information.

inconsistency, file Form 8082.

General Instructions

Schedule K-1 doesn't show actual

Sale of S Corporation

dividend distributions the corporation

Purpose of Schedule K-1

Stock

made to you. The corporation must

The corporation uses Schedule K-1 to

report such amounts totaling $10 or

Gain or loss from the disposition of

report your share of the corporation's

more for the calendar year on Form

your S corporation stock is generally

income (reduced by any tax the

1099-DIV, Dividends and

net investment income under section

corporation paid on the income),

Distributions.

1411 and may be subject to the net

deductions, credits, and other items.

investment income tax. See Form

Inconsistent Treatment of

Keep it for your records. Don't file it

8960, Net Investment Income

with your tax return unless backup

Items

Tax—Individuals, Estates, and Trusts,

withholding is reported in box 13

and its instructions for information

Generally, you must report corporate

using code O. (See the instructions for

about how to figure and report the tax.

items shown on your Schedule K-1

Code O. Backup

withholding, later.)

(and any attached statements) the

International Boycotts

The corporation files a copy of

same way that the corporation treated

Schedule K-1 with the IRS.

Every corporation that had operations

the items on its return.

in, or related to, a boycotting country,

For your protection, Schedule K-1

company, or a national of a boycotting

If the treatment on your original or

may show only the last four digits of

amended return is inconsistent with

country must file Form 5713,

your identifying number (social

International Boycott Report.

the corporation's treatment, or if the

security number (SSN), employer

corporation hasn't filed a return, file

identification number (EIN), or

If the corporation cooperated with

Form 8082, Notice of Inconsistent

individual taxpayer identification

an international boycott, it must give

Treatment or Administrative

number (ITIN)). However, the

you a copy of its Form 5713. You must

Adjustment Request (AAR), with your

corporation has reported your

file your own Form 5713 to report the

original or amended return to identify

complete identifying number to the

corporation's activities and any other

and explain any inconsistency (or to

IRS.

boycott operations that you may have.

note that a corporate return hasn't

You may lose certain tax benefits if

been filed).

Dec 21, 2016

Cat. No. 11521O

Shareholder'S Instructions For Schedule K-1 (Form 1120s) - 2016

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